Industry analyzes implications

By Brad Shewmake, InfoWorld |  Government

WITH THE PROPOSED antitrust punishment for Microsoft now known, those within the IT industry shifted their attention from whether the punishment is appropriate to its anticipated effect on the high technology market as a whole.

Not surprisingly, longtime Microsoft foe Sun Microsystems welcomed the breakup plan, saying in a written statement, "Although this decision will inevitably be seen as controversial, it's important to remember that these measures will increase competition in the computer industry. These measures also will protect Internet technologies from becoming the proprietary preserve of any one company -- which was, and Sun believes still is, Microsoft's goal."

The statement also contained a quote from Scott McNealy, chairman and CEO of Sun Microsystems. He compared the Microsoft case to the antitrust case against AT&T, which required the latter to exit the local phone market in 1984 in a move that led to the creation of the Baby Bells.

McNealy said, "Nobody wants to go back to the days of one telephone company. Everyone cares about the freedom of choice, which is why today's ruling is so monumentally important both to the industry and consumers. Microsoft has expressed no regret for its actions throughout these proceedings, and the company has not recognized any wrongdoing. This is why a combination of structural and conduct remedies is the right and essential means to deal with Microsoft's continued abuse of its monopoly power. Let's remember as this process continues that scrutiny is good; with Microsoft, the more scrutiny the better."

Ransom Love, president and CEO of Caldera, based in Orem, Utah, agreed that there are similarities between the two antitrust cases and added that a breakup of Microsoft would lead to more innovation.

"Many said [a breakup] will somehow penalize [Microsoft's] OS business, but in reality I think it would free them up to do some things that they would need to do anyway to be more responsive to users' demands," Love said. "In fact, I would argue, like with AT&T's case, Microsoft should take a leadership role in the breakup and voluntarily move forward and make it a positive for them," he said.

In particular, Love said that the breakup could boost Linux's chances. "By breaking [Microsoft] up it means [Microsoft's] applications business would put its sights right on Linux, so that is the immediate benefit for Linux. Long-term, I think Microsoft's operating system OS business would also have to do something with Linux as well, which is not bad for Linux, either. In both cases it would validate Linux as an alternative but more importantly do so as the definitive open Internet platform in the industry," Love said.

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